Unpacking Mediation 1: Confidentiality

What is mediation? Usually the answer is something like:

Mediation is a voluntary and confidential process where the parties to a dispute invite a neutral third party to facilitate them finding their own solution to their dispute.

Does this theoretical definition apply in practice? In this series of five blogposts I look at mediation keywords: confidential, voluntary, neutral, facilitate, and party autonomy.

Let’s start with confidential. How confidential is mediation? Why does it matter?

Its importance can be seen from this exchange at a recent shareholder dispute mediation.

Which side are you on?” a barrister asked me as I asked his clients to sign the Mediation Agreement.

I’m not on anyone’s side. I’m neutral.

No, no. I didn’t mean that. Is what we tell you confidential until we tell you otherwise or do you assume it’s disclosable unless we tell you that it’s confidential?

I reassured him that everything is confidential until I am told otherwise or it becomes blindingly obvious. Increasingly though the presumption seems to be the other way. What does this mean for clients, advisers and mediators?

Let’s be clear what we are talking about.

At mediation two types of confidentiality coexist: external and internal. Most mediation agreements state that what happens at mediation cannot be discussed with anyone not present at the mediation except for legal advisers. This is external confidentiality. It applies to most types of mediation: civil and commercial, workplace, family and community. There are exceptions, for example in family mediations confidentiality is not attached to financial disclosure.

Internal confidentiality covers communications between a party and the mediator. Most mediation agreements stipulate that the mediator will not disclose anything said to them in private sessions without express consent. As the barrister’s question shows, this is not a universal rule.

It follows that everyone must be clear whether what the mediator is told in private sessions is confidential or not. Check at the end of each session. A big part of what mediators do at mediation is the managed disclosure of information.

As you work through the day be prepared for the mediator to be asking more frequently if they can tell the other room what you have said to them. Be prepared to say “yes”. People often have different opinions because they have different facts. The more that everyone has the same information the less scope there is for different opinions.

Reality-check yourself. Ask why you think that what you have said is confidential. Some things are obvious, for example, the legal advice you have been given, although parties are usually keen to share favourable advice, or your tactical intentions if the case doesn’t settle. Are you going to put the company into liquidation or make a Part 36 offer? Information is often classified as confidential because of an instinctive reticence, a worry that disclosing information gives the other side an advantage, after all knowledge is power, or a lack of negotiation experience or strategy. Always ask the mediator how disclosure will help the process of achieving settlement.

Why is internal confidentiality important? After all, in many mediations there is limited or no confidentiality. Most family mediations are conducted entirely in joint sessions. So are many community mediations. Some civil and commercial mediators use joint sessions as much as possible. But even at mediations with extensive joint sessions parties often want some private time so they can collect their thoughts, take advice or talk to the mediator. In practice completely open discussions and negotiations don’t happen.

The real answer lies in the mediator’s role. Some parties treat mediators as glorified messengers taking selected gobbets of information or offers from one room to the other. Others exclude them while they and their advisers discuss the next move. They are controlling the exchange of information.

Some mediators play a more proactive role by providing guidance on settlement, directing discussions and acting as negotiation coaches. Mediators can only do this if they are trusted. Respecting confidentiality is a good way for mediators to show that they can be trusted. Once the parties have confidence that the mediator will respect confidentiality they are more open in their discussions.

Generally as the mediation progresses and the parties and their advisers relax and become more confident both in the process and the mediator, information is shared more freely. Go with the flow.

So how confidential is mediation?

Confidentiality is not absolute. See the case of Farm Assist [2009] EWHC 1102 (Comm) where the mediator was required to answer a witness summons. The court can, if it considers it to be in the interests of justice, call for evidence of what happened at a mediation. Be realistic. Judges can always decide that something is in the interests of justice.

There is no special mediation confidentiality or privilege. But the parties can bind themselves to a contractual confidentiality. This can be waived. It can also be lost by unconscionable behaviour including threats or blackmail. See the salutary warning in the case of Ferster v Ferster [2016] EWCA Civ 717.

Costs information is not necessarily confidential as in the case of Savings Advice v EDR Energy [2017] EWHC B1 (Costs).

So be careful what you say and how you say it. If you provide costs information make sure that it is accurate.

External confidentiality can cause more difficulties than internal. Representatives of corporate parties often have to report back; many business, professional and social worlds are small worlds where everyone gossips, family members talk amongst themselves assuming that confidences will be kept. In practice, although problems do arise they are few and far between and of limited impact.

Remember that confidentiality is not the same as without prejudice privilege which in English law is implied into all genuine settlement discussions. There are overlaps but also important differences. Take care not to confuse or conflate them.

For fuller discussions of the issues raised in this post see Tony Allen’s Mediation Law and Practice and my Mediation Advocacy: Advising and Representing Clients at Mediation, which has just come out in its second edition.

Stephen Walker is the author of: Mediation Advocacy: Representing Clients in Mediation (2nd edn); FAQs for Mediators; Setting up in Business as a Mediator; and Mediation: An A-Z Guide all published by Bloomsbury Professional.  ©

Written by Stephen Walker

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